Rentier State Building in Afghanistan: A Political Economy View

By Geoff Burt (in Waterloo)

Have the international community’s statebuilding efforts established a rentier state in Afghanistan—with a government dependent on international aid and a corrosive internal struggle for political rents? That is the analysis of Dr. Florian Kuehn, an Assistant Professor and Senior Researcher at Hamburg’s Helmut Schmidt University, who gave a fascinating talk on May 17, 2010 at The Centre for International Governance Innovation.

Afghanistan remains heavily reliant on international support; more than 70 percent of the budget in 2009-2010 came from foreign sources. Politics is this context is concerned more with securing international aid than responding to public demands for goods and services. Kuehn stresses the importance of seeing the Afghan state—the most centralized in the world—as a contested political space where there is extensive bargaining and deal-making between the central government and local power holders.

Just as a powerful elite can monopolize rents from oil revenues, as they have in the Middle East, Afghanistan’s political elite has been locked in an internal competition for political rents from the international community. As is the case with oil-rich authoritarian regimes, as long as the commodity (oil or in the Afghan case, political position) remains intact, maintaining the rent requires nothing more than remaining in power.

The result has been a de facto privatization of the public space. Because their authority tends to come from above (through appointment), rather than from below (from election), political figures have little incentive to use funds economically or productively to foster development. At every level there are Afghan government positions being run like businesses—officials who “bought” their post are eager to “sell” any appointments they are responsible for. As a result, the government has become, in Kuehn’s description, a complex pyramid of economic and personal relations.

Further complicating matters, Kuehn notes that Afghanistan’s poppy economy is dominated by a group of 20-30 families, whose position of power as the primary traders of opium and heroin allows them to earn the largest share of profits from the drug trade. These drug rentiers, as local power-brokers, cooperate alternatively with Western governments, the Afghan government and the Taliban. A high proportion of drug proceeds leave Afghanistan’s borders, often heading for Dubai or Switzerland. Of what remains, some is spent on investment in Afghanistan’s legitimate economy, but much is spent on “lobbying” government officials, leading to a messy entanglement of the drug trade, the licit economy and government.

The effects of these clientelist networks extend to the farthest outposts of the Afghan government, affecting ordinary Afghans through corrupt local officials. This corruption can be seen as a form of taxation on the population. But Kuehn is careful to point out that taxation implies a reciprocal relationship of representation and responsibility, something totally absent in the Afghan case.

Political rent seeking also plays a role in Afghanistan’s rising inequality. There is a large and growing disparity between small groups of urban, English-speaking elites who can take advantage of rents, and rural, geographically-distant Afghans who cannot. Counterintuitively, Kuehn argues, the international community has little influence on the situation despite providing the rents because their only leverage—disrupting the flow of support—is untenable given Afghanistan’s real and perceived security significance.

The opinions expressed in this article/multimedia are those of the author(s) and do not necessarily reflect the views of CIGI or its Board of Directors.

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